A bond that can be called, or purchased, by the issuer before the bond has reached maturity. The issuer usually has to pay a premium to purchase the bond before it reaches maturity. Issuers will call a bond if interest rates have decreased. Therefore, the callable bond has an interest rate risk to the bondholder. Unlike the American callable bond which can be called at any time, the European callable bond can only be called on a preset date. Also called redeemable bond.
Related information about European callable bond:
- European Callable Bond Definition | Investopedia
A bond that can be redeemed by the issuer at a predetermined date prior to maturity, such as the last coupon date. European callable bonds behave similarly to ...
- What is European callable bond? definition and meaning
Definition of European callable bond: A bond that can be called, or purchased, by the issuer before the bond has reached maturity. The issuer usually has to pay ...
- Creating Synthetic Callable Debt Using Swaptions | FINCAD
[1] A 4/1-year European callable bond. We use the abbreviation 1X to indicate the "one-time" call exercise feature. The Farm Credit System also routinely issues ...
- A Numerical PDE Approach For Pricing Callable Bonds
Feb 2, 2001 ... European callable bond: the issuer has the right to call the bond at only ... The value of this European callable bond K(r, T) can be calculated as ...
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Figures 1a & b: Price of the European Callable Bond (a) and the Embedded ... A comparison of the two theoretical prices of the European callable bond is shown ...
- Series Solutions/e
Figure 1: European Callable Bond. t0 is the present date, tn the notice date, tc the .... 1a, then the price of the European callable bond today with remaining time ...
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-0.15. -0.10. -0.05. 0.00. Interest Rate. Percentage Error. (a). #1. #3 & #4. #2. Relative Error of the European Callable Bond on the Notice Day (BüTTLER [1995 ]).
- Download as a PDF - CiteSeer
European callable bond: the issuer has the right to call the bond at only one ... The value of this European callable bond K(r, T) can be calculated as follows.